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Thursday, June 2, 2016

The "growth funk" and feelings of security

I put my dog down yesterday. Humble Pie. It was quite possibly one of the hardest moments of my life. My dog was a free dog, she never had a leash she never had a collar, she stayed by my side of her own free will. She trusted me, that I would keep her safe right up to the very moment I nodded and the vet put her to sleep for good.

I took her to her favourite park before going to the vet. She died on her favourite blanket, in her favourite position, cuddled in my arms thinking she was safe.

Humble Pie

She wasn't.

Whether this was the right decision at the right time is a question that is going to haunt me for a long time. The timing was due to other aspects of my life, combined with her already being quite old. I feel selfish, I feel like I betrayed her and her trust and I should have tried harder. But most of all I wish I could have asked how she felt, warned her it was coming, anything. I couldn't, it was my decision and mine alone. It's the feeling of betrayal which is haunting me most of all. But what else could I do? The worst part is I think even if I could have warned her, I wouldn't have, for her sense of security. It's been a very conflicting day as I battle with the different point of views that insist on infiltrating my head.

The feeling of security is a powerful influence on life. In the moment of her death she felt totally secure, not afraid, and then it just happened. She never saw it coming. The feeling of security (and insecurity) however is also an excellent tool of manipulation.

It's a constant theme in movies, agents working above the law to protect the public from unknown evils, governments being aware of events and not providing a warning to their people. Usually in some form to keep the public "safe" from certain chaos if the stupid peasants found out. Mass manipulation of this sort is often portrayed as for the good of the people. Much as ultimately the involuntary betrayal of Humble's trust was for the good of her (I hope anyway) and my desire for her to not die in fear, pain, or alone.

The status-quo wields the weapons of security, and insecurity quite effectively. The feeling of security is inherently anti-change while the feeling of insecurity is inherently pro-change. Feeding the population a balance of the two can produce any desired results. Using the feeling of security Humble Pie had no desire to change her situation, despite being in a strange place with a strange person at the most dangerous moment of her life yet the slightest feeling of insecurity throughout her life would send her skittering away even though it was all mostly harmless.

False security is a blinder, and Canadians are chalk full of false security.

I had an interesting Twitter exchange today about the Chinese diplomat "berating" our poor journalist for asking about human rights violations. An interesting choice of words isn't it? "berates"?

"Other people don't know better than the Chinese people about the human rights condition in China and it is the Chinese people who are in the best situation, in the best position to have a say about China's human rights situation," he continued.

"So I would like to suggest to you that please don't ask questions in such an irresponsible manner. We welcome goodwill suggestions but we reject groundless or unwarranted accusations."

We over here look at such statements likely with disbelief, because we know the Chinese indoctrinate their people with propaganda in fact our media ensures we know it. However I think it's also probably safe to say that many Canadians would believe the statement if it were said about us. Even if we were called out on human rights abuses, we know better, because we're Canadian. Surely us being Canadian must mean we are in the best situation, the best position, to have a say about Canada's human rights situation. But where are the journalists asking about it at every opportunity?

And round and round it goes. Of course if it didn't happen on your T.V. it didn't happen, did it? Do you really believe the Chinese are being indoctrinated with pro-nationalist crap and you aren't? What do you hear more about China's abuses? Or Canada's? From who? Now go read China's news.

Every country does it, the world does it, and why? The feeling of security. Not security from the terrorist boogymen but security of self, of purpose, of that feeling that you're the "good guy", that you're right and they're wrong.

What's funny is the diplomat is totally correct, it was irresponsible to ask, Canadians just don't understand why. We see that as some sign of journalistic freedom, while the Chinese view it as a form of disrespect. He was here because we want to do business with the Chinese. As I warned in my piece "Canada may be preparing to decouple from the USD":

These nations we are aligning with however do not cherish democracy as we do. We will be a minority in this new alliance, and of this we should be wary.

We want in with them, not the other way around. But it makes for a great drum-beating headline as Canadians are once again fed the false security of the supposed international concern Canada has for human rights. It makes us feel good and feeling good is essential to maintaining control and a feeling of trust, even if the actions being taken are knowingly harmful and against our best interests.

Take the Flint water crisis, for example, it has all the trademarks. The government not warning the people, the false sense of security in the idea that the U.S. is an "advanced nation" so something like that couldn't possibly be happening, and yet.. there it is. It is happening, and will continue to happen, and if you think that's the only one you're still lying to yourself.

"Barring an economic collapse, therefore, Canada will have to reconsider its planned oil and gas production growth and demand real emissions reductions from the oil and gas sector in order to have any hope of meeting its ... commitment," Hughes writes.

Alex Ferguson, a vice-president of the Canadian Association of Petroleum Producers, said technological change in the oilsands is likely to prove Hughes's assumptions wrong.

"You're going to see something in the next three, four, five years or so in terms of proving some of that out," he said. "We, collectively, need to make a conscious bet that technology is going to help us in this challenge."

Yes. Instead of prepare for the inevitable what we should do instead is make a "collective conscious bet" on the future. And if we lose that bet? Well, no one really knows, do they? By the way how are those tailings reclamations coming? Got any new ones besides the fake one you just moved the tailings out of to "prove" you could reclaim one? Of course as I've discussed in previous posts what they are just glossing over is that most of these "innovations" translate to automation as well. The belief that the oilsands will come roaring back to life is wrapped in the security that the jobs will return with them. They won't - but hey I give them an 'E for effort' coming up with their excuses why not..

In fact if global growth doesn't return, oil demand won't either which brings me to my next article of interest on another topic that is wrapped in a false security with statements like "best recovery in the G7" or "Strong regulated banks": The absolute gong show the global economy has become.

I caught an interesting sponsored article in the Financial Times, which closes with something quite profound. That the FT would publish it, sponsored or not, is quite interesting unto itself. This isn't ZeroHedge but the FT and the second question I couldn't help but ask was, who is this for? It was written by an investment firm BlackRock but I'm finding it difficult to find a clear reason why they would pay for it to be published.

As central banks exhaust their ammunition, some countries are turning to debt-driven fiscal stimulus. Canada’s own stimulus program may help boost the domestic economy, says Aubrey Basdeo, managing director and head of fixed income at BlackRock Canada. On the other hand, it may lead to unintended consequences, including rising interest rates and an overvalued currency.(RF: Which also means an undervalued USD relative to the countries they would import from (read more))

“Central bank monetary policy has helped drive asset prices higher with the help of interest rate cuts and quantitative easing since the financial crisis,” he says. “But the effectiveness of these policies may be starting to wane and the ability of global central banks to respond to the next downturn appears limited.”

Interest rate cuts could lose their effectiveness if borrowers become accustomed to a low-interest-rate landscape because there’s no rush to borrow or invest. Low rates also make savers poorer, reducing consumer demand.

“Negative interest rate policies by the likes of the Bank of Japan and the European Central Bank that are targeted at depreciating currencies may also be close to hitting a limit,” says Basdeo. “It may make sense to weaken your currency if you’re an exporting nation seeking growth, but when everyone else moves in the same way, it starts to lose its efficacy.”

Just a note, notice that his reasoning for why consumers won't borrow even more is that they're "accustomed" to a low-interest rate environment yet also admits it makes savers poorer. Well, if you're not a borrower, and you're not a saver, what are you? Admitting that the emergency low interest environment isn't working is because consumers are tapped is a media no-no. They will talk about one, or the other, but never both at the same time which is absurd isn't it being that clearly your capacity to borrow more and more is obviously directly associated to your ability to service that debt. Anyway, moving on...

One policy option is a mix of broader credit easing by central banks, combined with either government spending on infrastructure projects and/or tax rebates. However, many governments are wary of deficits.

“When you come out of a debt binge like the one preceding the financial crisis, the last thing you want to do is go on another binge,” says Basdeo.

Governments and consumers have reduced debt loads since the financial crisis. Corporations, however, have borrowed heavily. Yet instead of investing in new plants and equipment to improve productivity and spur growth, they have leveraged inexpensive debt to buy back stock and pay dividends to investors.(RF: aka "the recovery")

Basdeo says the world will be looking carefully at the Canadian government’s gambit to rack up a stimulus debt of $113 billion over the next five years, most of it earmarked for infrastructure spending. Australia has also pulled the trigger on a A$37-billion stimulus program and a rate cut.

“If Canadian and Australian fiscal stimulus boosts economic growth and bolsters consumer and corporate spending, then other countries may adopt similar fiscal approaches,” he says.

The downside risk? When governments spend, interest rates could rise. That would increase capital flows into the country, pushing up currency values.

“For a small, open economy dependent on trade, this scenario would be particularly negative to Canada when we are trying to boost our economy through manufacturing exports that benefit from a lower loonie,” says Basdeo.

Japan, the poster child for deficit infrastructure spending, also offers a note of caution. After more than 20 years, the policy has resulted in little growth.

The growth funk miring most major developed economies remains a headwind to future growth in Canada, Basdeo adds.

“As a result, the Canadian deficit experiment may lack the punch on its own that would sustain it as a model for others to follow,” he says. “Rather than wait to see if it works, the optimum solution is likely a coordinated, comprehensive global policy response which relaxes excessive dependence on central bank policy and begins a renewed effort to achieve good growth via deficit spending.”

The "growth funk". Cute, isn't it? And despite no modern economics reason for it we continue to believe infinite growth is possible. The last paragraph is the kicker: "the optimum solution is likely a coordinated, comprehensive global policy response which relaxes excessive dependence on central bank policy and begins a renewed effort to achieve good growth via deficit spending". He is calling for the start of a centralized global economic system, which naturally is going to be presented as the "solution" to the problem governments and central banks are knowingly creating, the prosperity they are stealing from the future with not one ounce of evidence it can be paid back. We're doubling down on the bet that the future will be incredibly larger than the present when the evidence suggests everything but, and those in charge know this. There will be no warning.

“People will have to make other arrangements to ensure they are carrying a bit more cash or extend their credit or ensure they have enough on their Visa to pay for gasoline,” said Dan McTeague, a senior petroleum analyst at GasBuddy.com. “Newfoundland is now home to the most expensive gasoline in North America and likely the Western Hemisphere.”

I opened my campaign last month with the argument that, if the Liberal Party is to become a positive force for change in Canada, we need to give voice to the aspirations of our middle class.

Personal income for middle-class Canadians has stagnated for more than a generation. This deeply troubling development is masked by a rise in family income, due to the entry of a new generation of well-educated, hard-working women into the workforce. While this phenomenon is overwhelmingly positive, we must be clear-eyed in understanding that it is a one-time benefit.

It all sounds great until you reach that last line. A "one time benefit", just as new suckers entering into a ponzi are a "one time benefit". His article went on to say:

So, we’re left with the vexing question: where will the next wave of growth for the middle class come from?

The "next wave of growth". As in what new suckers will we find to keep the unsustainable "disturbing trend" of wage stagnation and a consumer economy going. His article went on to describe how Canada's economic future resided in China, and emerging markets. The same China Canada's journalist insulted by raising the issue of human rights on a business trip. We just don't get it, democracy is a game and our new business partners -- which we are relying on for the "next wave of growth", despite the fact all indicators show that China will likely not be the source of growth we'd hoped -- aren't playing it. Nor do they need to.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.